Thesis

On
Loan Classification Practice in Commercial Banks
of Bangladesh
STAMFORD UNIVERSITY
BANGLADESH
i.
Thesis Report
Loan Classification Practice in Commercial Banks of
Bangladesh
Submitted to:
Nigar Sultana
Senior Lecturer,
(Thesis Supervisor)
Department of Business Administration
Stamford University Bangladesh
Submitted by
Ranjan Kumar Das
BBA (Maor in Accounting)
Batch! "#
$D%BBA &"# ''(&#
Department of Business Administration
Stamford University Bangladesh
10/09/2011
ii
Letter of ransmittal
August &", )&''*
To
!igar Sultana,
Sr* Lecturer,
Department of Business Administration,
Stamford University Bangladesh,
(', Siddes+ari ,oad, Dha-a%')'.*
Sub"ect: Submission of hesis re#ort
Dear Madam,
/ith due respect and hum0le su0mission, $, +ould li-e to inform you that, there is the thesis
report on 1Loan Classification Practice in Commercial Banks of Bangladesh$2 +hich +as
assigned to me to su0mit under the dissertation program* $t +as a great pleasure for me to do the
assigned o0* $ made every endeavor to prepare this report accurate 3 tried my level 0est to
accumulate relevant and insightful information* This report really helps me to understand the
difference 0et+een practical and theoretical -no+ledge of this Ban-*
$n fine, $ am very grateful to you for assigning such an important area of 0an-ing and your -ind
and generous guidance to ma-e the report successful*
Sincerely 4ours,
%an"an &umar 'as
BBA % &"#'' (&#
5rogram%BBA, "#
th
Batch,
Maor in Accounting,
Dept. of Business Administration,
Stamford University Bangladesh.
iii
'eclaration of Student
August &", )&''*
$, %an"an &umar 'as, declare that the Dissertation ,eport on 1Loan Classification Practice in
Commercial Banks of Bangladesh$2 em0odies the result of my o+n research +or-s, pursued
under the arrangement of Ban- Asia Limited*
$ further affirm that the +or- reported in this thesis is original and no part or +hole of the report
has 0een su0mitted to any other university or institution for any degree or any other purpose*
____________________________
%an"an &umar 'as
BBA%&"# ''(&#
5rogram%BBA, "#
th
Batch,
Maor%Accounting,
Dept* of Business Administration
Stamford University Bangladesh*
iv
S()*+%' ,!-./%S-0 B(!1L('/S2
Certificate of su#er3isor
o 4hom -t )ay Concern
This is to certify that the internship report on 1Loan Classification Practice in Commercial
Banks of Bangladesh$ for partial fulfillment the degree of Bachelor of Business Administration
(BBA) maor in Accounting from the Stamford University Bangladesh carried out 0y %an"an
&umar 'as, $D 678&"# ''(&# under my supervision* Under my guidance and supervision this
report is 0eing carried out successfully* 6o part of the internship report has 0een su0mitted for
any degree diploma, title, or recognition 0efore*
$ +ish his every success in life*
-----------------------------
!igar Sultana
Senior Lecturer
'e#artment of Business (dministration
Stamford ,ni3ersity Bangladesh
v
Preface
This report is the outcome of my Thesis program under the Bachelor of 0usiness Administration
(BBA) course of the Business Administration of the Stamford University Bangladesh conducted
at the Loan 9lassification 5ractice in commercial Ban- of Bangladesh* The o0ective +as to
introduce a Loan 9lassification 5ractice of Ban- sector of Bangladesh* And this e:perience +ill
0e helpful my life* $f +e can ensure this -ind of loan classification practice in 0an-ing sector +e
+ill a0le to 0etter performance in case of 0an-ing loan sector* This is my pleasure to su0mit my
thesis report entitled 1Loan 9lassification 5ractice in 9ommercial 0an- of Bangladesh;* /hile
preparing the report $ have tried gather as much information and data as possi0le and research
those to enrich this report* $ 0elieve that it +as a tremendous e:perience to +or- +ith my
honora0le teacher 6igar Sultana in this research and it +as enriched my -no+ledge and
e:perience* This report is not free from limitations* There might have pro0lems regarding lac-
and limitations in some aspects*


(ckno5ledgement
vi
<irst and foremost, $ +ould 0e grateful to the Almighty Allah as $ have successfully completed
this report +ithin due time and for all the incidences $ had to undergo +hile preparing this report*
Then $ +ould li-e to ta-e the opportunity to e:press my gratitude to my honora0le faculty !igar
Sultana6 Senior Lecturer, Department of Business Administration, Stamford University
Bangladesh* /ithout her continuous support and suggestion, this report +ould not come into
light*
$ +ould li-e to than- =:ecutive 7fficers, and all other employees of South =ast Ban- Limited,
Ban- Asia Limited, Agrani Ban- Limited and 5remier Ban- Limited +ho helped me a lot to
collect information for preparing my report*
Besides $ am also grateful to the authors, researchers, and article +riters +ho>s Boo-s, ,eports,
and ?ournals have helped me to prepare my $nternship ,eport successfully*
/7ecuti3e Summary
vii
The Dissertation report is prepared as re@uirement of BBA program of Stamford University
Bangladesh* This report focuses on my findings and analysis a0out, Southeast Ban- Limited,
Ban- Asia Limited* This report +ill give a clear idea a0out the Loan 9lassification 5ractices
handed 0y 9redit division of Ban- Asia Limited, Agrani Ban- Limited and 5remier Ban-
Limited* =specially this report focuses on the 1<inancial performance evaluation of 9redit
Administration handeled 0y these 0an-s*
The main purpose of the study is to have a 0etter orientation of loan classification practice of
Southeast Ban- Limited, Ban- Asia Limited, 5remier Ban- Limited and Agrani Ban- Limited* $
have chosen the main 0ranches of these 0an-s as samples of my study* $ have mentioned the
overvie+ of Ban- Asia Limited +hich gives a clear idea a0out esta0lishment of Ban- Asia
Limited, 5remier Ban- Limited and Agrani Ban- Limited* $t also e:plains the rules and
regulations set 0y the Bangladesh Ban- for loan classification practice* $t also discusses a0out
financial performance of the three 0an-s*
Basically the a0ove%mentioned 0an-s are 9onventional Ban-ing 0ases* They follo+ the
alternative concept of 9onventional Ban-ing +hich represents uni@ue human approaches loan
classification 0an-ing 0ased on profit%oriented economy devoid of interest* $n this regard these
0an-s have introduced a num0er of income generating programs for the million of ur0an and
rural poor*
ABBREIATIONS
(/C (ccount
( ABL Agrani Ban- Limited
viii
A9S5D Agricultural 9redit and Special 5rogrammers Department
AL97 Asset%Lia0ility Management 9ommittee
ASA Association for Social Advancement
B
BB Bangladesh Ban-
BAL Ban- Asia Limited
B,5D Bangladesh ,egulatory 3 5olicy Department
BM=T Bureau of Manpo+er =mployment and Training
B,DB Bangladesh ,ural Development Board
BS9$9 Bangladesh Small 9ottage $ndustries 9orporation
B,A9 Bangladesh ,ural Advancement 9ommittee
C
9D 9urrent Deposit
9$B 9redit $nformation Bureau
9,A 9redit ,is- Arading
9,M 9redit ,is- Management
' D7S Department of 7ff%site Supervision
/
=9 =uropean 9ommunity
=9A$ =:ternal 9redit Assessment $nstitute
*
<S,5 The <inancial Sector ,eform 5roect
<D, <i:ed Deposit ,eceipt
1 AD5 Aross Domestic 5roduct
-
$<DD $ssuance of <oreign Demand Draft
$9T $nformation and 9ommunication Technology
$<AD $nternational <und for Agricultural Development
$B9A $nter Branch 9redit Advice
$BDA $nter Branch De0it Advice
$<B9 $n+ard <oreign Bills for 9ollection
L
L9A Latter of 9redit AuthoriBation
L,A Lending ,is- Analysis
L$9 Lo+ $ncome 9ountries
) M$S $T and management systems
! 67,AD 6or+egian Agency for Development 9o%operation
+ 7B9 7ut+ard Bill 9ollection
7D 7ver Draft
P
5AD 5ayment against Document
5BL 5remier Ban- Limited
S
57 5ayment 7rder
SS Su0%standard
STD Short Term Deposit
S=BL Southeast Ban- Limited
ix
S/$<T
Society for /orld+ide $nter Ban- <inancial
Telecommunication
SMA Special Mention Account
S$DA S+edish $nternational Development Agencies

T9 Travelers 9he@ues
TT Telegraphic Transfer
, U95 Uniform 9ustoms and 5ractice
4
//, /orld /ide ,ecycling
/T7 /orld Trade 7rganiBation
x